Javier Hernani, CEO of Bolsas y Mercados Españoles (BME), has indicated that the ‘scrip dividend’ strategy, which consists of the creation of new shares in the market, is a way to consider to remunerate shareholders.
The CEO proposes this new solution after the European Central Bank limit the banking dividend to 15% of profitLikewise, it has already been used by several companies. "It is a way of maintaining remuneration and increasing the number of shares at the same time", has defended at the press conference after the annual Christmas speech, where the balance of the markets is analyzed.
Therefore, the entities will have to decide in the coming months on the path they will choose. Hernani has stressed that equity is in the regulator's focus. "It is a sensitive issue and we can say little about it", has pointed out.
Despite the fact that the Supervisory Board of the European Central Bank lift restrictions on banks on dividend distribution and share buybacks, has indicated to the entities that the 'payout' (percentage of profit allocated to dividends) should not exceed 15% taking into account the accumulated net benefits between 2019 and 2020.
The CEO of BME affirms that in Spain the banking sector is experiencing a moment of reflection, the merger of CaixaBank and Bankia and, probably, others will emerge. In this way, Hernani ensures that these operations are positive and that they guarantee a increased liquidity in the combined company.
"The combination of all these factors will surely make the stock market more attractive, of course also taking into account the expected economic recovery", has affirmed.
. (tagsToTranslate) Hernani (t) (BME) (t) banking: (t) & # 039; scrip (t) dividend & # 039; (t) can (t) good (t) option (t) for (t) reward (t) Category: All (t) Category: Market Report (t) Category: Pulses